Poor news from retailers Target (TGT) , Lowe's (LOW) and Staples (SPLS) is receiving the blame for the poor action today. That may be a good excuse, but it is sudden cooling of momentum stocks that is my main focus. It doesn't much matter what the reason is for the shift, but suddenly market players have stopped chasing -- and we are seeing some sharp pullbacks.
If you have used stops and taken some gains into strength, you should still have a pretty good cushion for recent profits, but it is extremely important that you stay focused on keeping accounts as close to highs as possible. That is the secret to long-term outperformance.
The good news about the sudden dearth of momentum is that it will give us some good opportunities. Two recent winners, Global Blood Therapeutics (GBT) and Oclaro (OCLR) , are ones I'll be adding as they find support.
Recently, I've had some very good results with IPOs. Both Acacia Communications (ACIA) and TPI Composites (TPIC) have been stellar performers. There are two more very recent IPOs that I will be watching as they develop further.
MedPace Holdings (MEDP) is a clinical contract research organization (CRO). It is growing its top line at about 20% year over year. It priced its IPO at $23, which was at the top of the expected range, and had been trading strongly before pulling back today. I'll be looking for some entry points as the trading range develops further.
Airgain (AIRG) is a less well-known offering. The company makes embedded antenna technology that is used in a variety of wireless devices, like routers, digital TVs and access points. The IPO priced under the $9 to $10 expected range, at $8, and is trading under that price presently. I will be looking for the stock to trade better as initial coverage from the underwriters is issued in about a month.